Why Do We Use Stock Trend Lines?

Stock traders use stock trend lines in stocks trading analysis because stock prices move in stock trends and the best stock trading tool to interpret these stock trend are the stock trend lines that are to indicate the direction of the stock trend either upwards or downwards.

Stock trend lines are also commonly used by stock traders because they are the most simple form of technical analysis that is used by many stocks traders to determine where to open buy or sell stocks trades.

Stock Trading Trend lines work by indicating the support levels of stock prices or the resistance levels of stock prices.

Stock Trading stock prices move in a series of support and resistance levels and these series of support and resistance pattern then forms a general market direction either upwards or downwards.

Traders use stock trend lines to depict these patterns on the stocks price charts as shown on the stocks examples illustrated & described below:

Minor Resistance/Support levels

In minor resistance & support points the stocks price will quickly form these points in the short term and quickly move past these resistance and support points during a stocks trend.

Upwards Stock Trading Trend: The upward stock trend pattern of this minor resistance and support points will form a series of areas whose general direction is upwards.

Upwards Stock Trading Trend Series of Support and Resistance - Why Do We Use Stock Trend Lines?

Downwards Stock Trading Trend: The stock trend pattern of this minor resistance and support points will form a series of areas whose general direction is downward.

Downward Stock Trading Trend Series of Support and Resistance - Why Do We Use Stock Trend Lines?

Traders then analyze these stock trend line using stock trend line technical analysis to determine when & where to open a buy or a sell stock trade depending on the direction of the stock trend line.